National Trust facing extinction?

The National Trust for the Cayman Islands, overseer of blue iguanas, a dozen historic properties and fully 5 percent of the land mass of the territory, is slowly going broke.

Like so many others, a victim of declining revenues, consequently shrinking budgets and rising costs, the 25-year old organization faces a funding crisis that looks set only to worsen. Traditional sources of sponsorships, donations and support are themselves strapped, forced to become more efficient and better focused, managing with less disposable income.

The trust budget – between $600,000 and $650,000 annually – has been falling for three consecutive years. Government grants, which account for 13 percent of the trust’s budget, have fallen proportionally as it confronts its own slippery debt levels, escalating demands for resources and tight fiscal constraints.

From a steady $308,000 per year – roughly five years ago – National Trust officials said government contributions have declined approximately 15 percent per year for three years, to $263,000, to $237,000, to $214,000, respectively.

Fundraising comprises only 9 percent of the trust’s annual budget, but has remained relatively steady at $100,000 per year, approaching $150,000 in 2012. It has been offset by declining donations, particularly among corporate sponsors, significant expenditures and growing costs for maintenance and insurance.

“We are back to 2005-2006 funding levels,” said Clare Lumsden, the trust’s financial accountant. “Our annual budget used to be around $750,000, $800,000, although we never quite achieved that.”

General manager Christina McTaggart said she has had to cut staff, discontinue the Cayman Wildlife Rescue Program and scale back maintenance at the trust’s 12 historic sites, while she struggles to create alternative revenue streams to meet a deficit running at $200,000 per year.

“In the last year, we raised about $100,000,” she said. “But a lot of that was in Little Cayman and not for general income, but for specific projects.

“It’s harder now to get sponsorships,” she explained, pointing to corporate donations, which Ms Lumsden describes as “massively fluctuating.”

Both she and Ms McTaggart point to “companies with expensive work permits. Bank taxes and fees are up, everyone is struggling.”

The trust’s pending 2012-2013 annual report is clear, stating, “corporate charitable contributions have suffered as government taxes and fees have reduced their available income so that it is increasingly hard to obtain sponsorship for our programmes.”

Special purpose vehicles and hedge funds, as they were routinely liquidated, comprised a “significant portion” of trust income each year, “but these vehicles are now being used far more efficiently so that there is very little residue to distribute to charity,” the report said.

“There is no charities law, so they are unregulated, and new ones are popping up a lot, competing for the charity dollar,” Ms McTaggart says, further complicating revenue-raising.

In its 25 years, the trust has acquired land, much of it donated, worth $11.3 million. Management costs, however, run approximately $100,000 per year, a figure which does not include improvements like trail-head markers and signage, running between another $50,000 and $100,000 per year.

Upkeep at historic buildings such as Bodden Town’s Mission House are the greater drain, however.

“The rest of the properties total $50,000 per year for maintenance and upkeep, although three in particular need major restoration to their structural integrity,” she said, naming West Bay’s Nurse Leila’s House, Savannah Schoolhouse and George Town’s Watler’s Cemetery.

The recent acquisition of Eldemire House and the renovation of Fort George represent further financial commitments.

One solution, Ms McTaggart said would be to gain access to a portion of government’s Environmental Protection Fund, pegged at more $43 million and earning approximately $5 million per year.

“We don’t want to touch the capital in the fund,” she said. “But if we could get a percentage of those annual earnings, maybe a portion of the interest, then we could go ahead with some of our other programs.

“Without us, the government could not meet its obligations to protect the land,” she said. “We are the only ones with the mechanisms to do that, the only ones doing what we do.”

Gaining access to a portion of the fund, she said, would mean “we could protect the land, and then raise money for our education, historic and other programs. Education is the most important, after all. What is the point of doing all this, of protecting this land if the kids don’t know what it’s all for?”

Ms McTaggart is seeking other ways to raise revenues, naming, for example, a Legacy Giving Program, wherein individuals can name the trust as part of their will; an adopt-nature program, whereby families and individuals can adopt a quarter-of-an acre for five years at $99 per year in any one of 10 specified areas of forest, shrub land or wetland; boosting membership by appealing to a wider population segment with cooking classes and a dive club; a lecture series; new tour options, including a “Go East” trip; Sister Island excursions; new heritage tours; writing a series of international grant applications; and targeting a “Friends of the Trust” program at wealthy individuals with an interest in conservation that could pledge as much as $100,000 per year.

Ultimately, she said, the trust would like to administer 10 percent of Cayman’s land mass by 2020, dubbed the “10 by 20” program, which, she predicted, would cost about $500,000 per year.

“The greatest challenge that the trust faces,” says the 2012 annual report, “is that of liquidity. Cash levels are significantly lower than in prior years at $711,000 (just over 50 percent of last year’s balance) due to land purchases, renovation of Eldemire House and operating deficits.

“Of this, only $155,000 is unrestricted, all other funds being committed to projects or committees. This means the trust has now virtually depleted all its resources. Raising funds to continue with all our programs, through lobbying of the government, pursuing international grants and energetic local fundraising is critical for 2013/14.

To understand where they are going, people need to know where they come from. The National Trust protects the natural and cultural heritage of the Cayman Islands, providing an anchor to the past, without which the country would lose its soul. If the Trust falters through lack of financial support from government and business, the results may not be immediately apparent, but once people notice that the last of their historic properties have been knocked down and turned into condos, and the last bits of native bush bulldozed for roads, it will be too late and there will be nothing left to save. Government needs to act now and do the honourable thing by using funds from the Environmental Protection Fund for its intend purpose, rather than using funds collected under the guise of protecting the environment to shore up its struggling finances.